China seeks more time to weigh Hanlong's Sundance bid

China has sought an extra month to review Hanlong Mining’s $1.34 billion bid for
Sundance Resources
, sending shares in the Australian iron ore group down nearly 6 per cent on Friday on worries about the fate of the long-delayed deal.

Sundance said it had agreed to extend the deadline for China’s National Development and Reform Commission to approve the takeover to July 31 to give it time to review the terms agreed with Cameroon on developing the $4.7 billion Mbalam iron ore project and Sundance’s recent increase in resources at its flagship project.

The commission’s provisional approval is key to Hanlong lining up finance from China Development Bank, seen as the biggest hurdle to the deal which was first announced a year ago.

Under the agreement, Hanlong must secure China Development Bank’s blessing by August 31.

“We are pleased with the progress of the SIA (scheme implementation agreement) with Sundance and are confident that we will achieve the required approvals," Hanlong chairman Liu Han said in a statement.

Sundance’s shares fell 5.7 per cent to 33¢ by 1pm AEST. That was 42 per cent below Hanlong’s offer of $0.57 a share, reflecting doubts about the deal going ahead by November.

The Australian Financial Review reported on Friday, without naming any sources, that Hanlong may line up a “big Chinese steel maker" to support its bid.

A spokesman for Sundance said the speculation was not new, but had no further comment. Hanlong could not immediately be contacted to comment on the report.